Throughout history, debt and war have been constant partners | Gilles Fraser

Ssomewhere in a Greek prison, former defense minister Akis Tsochatzopoulos watches the financial crisis unfold. I wonder how partly responsible he feels? In 2013, Akis (as he is popularly known) fell for 20 years, ultimately succumbing to the waves of financial scandals with which his name had long been associated. Because alongside lavish spending, houses and dubious tax returns, there were bribes, and that was the 8 million euro appreciation which he received from the German arms dealer Ferrostaalfor the purchase by the Greek government of Type 214 submarineswho sent him to prison.

There is this idea that the Greeks got themselves into the current mess because they paid themselves too much for doing too little. Well, maybe. But that’s not the full picture. For the Greeks also went into debt for the oldest reason in the book – one might even say, for the very reason that the public debt itself was first invented – to raise and sustain an army. The state’s need for quick money to raise an army is how industrial-scale moneylending comes into business (in the face of historic Church opposition to usury). Indeed, in the West, one could even say that large-scale public debt began as a way to finance military intervention in the Middle East – i.e. the Crusades. And just as saving Jerusalem from the Turks was the justification for massive military spending in the Middle Ages, fear of Turkey has been the reason given for recent Greek spending. In addition to German submarines, Greeks bought French frigates, American F16s and German Leopard 2 tanks. In the 1980s, for example, Greeks spent an average of 6.2% of their GDP on defense against a European average of 2.9%. In the years following their entry into the EU, the Greeks were the world’s fourth biggest spenders on conventional armaments.

So, to recap: corrupt German companies bribed corrupt Greek politicians to buy German weapons. And then a German Chancellor presses for austerity on the Greek people to pay back the loans they took (from German banks) with massive interest, for the weapons they bought from them in the first place . Is this an unfair characterization? A little. It wasn’t just Germany. And there were many other factors at play in Greece’s escalating debt. But the post-war difference between Germans and Greeks is not the tired stereotype that the former are hardworking and the latter are lazy, but rather that, among other things, the Germans have, for obvious reasons, been limited in their military spending. And they have benefited greatly from it.

Debt and war are constant partners. “The global financial crisis was due, at least in part, to the war,” Nobel Prize-winning economist Joseph Stiglitz wrote, calculating the cost of US intervention in Afghanistan and Iraq before the financial crash. $3 billion. Indeed, it was only this year, last March, that the British taxpayer finally paid back the money we had borrowed to fight the First World War. “It’s a moment that Britain should be proud of,” said George Osborne, as he paid the latest installment of £1.9billion. Oh good?

The phrase “military-industrial complex” is one of those clichés of 70s left-wing radicalism, but it was Dwight D Eisenhower, a five-star general no less, who warned of its creeping power in his last speech as president. “This conjunction of a huge military establishment and a large arms industry is new in the American experience. The total influence – economic, political, even spiritual – is felt in every city, every state house, every office of the federal government…we must not fail to understand its grave implications. Our labour, our resources and our means of subsistence are all involved; the same goes for the very structure of our society. Ike was right.

This week, Church House, HQ C of E, held a conference sponsored by arms dealers Lockheed Martin and MBDA Missile Systems. We preach about turning swords into plowshares while helping to normalize an industry that turns them again. The the Archbishop of Canterbury has been pretty solid on Wonga and try to bankrupt legal loan sharks. Now, the church has to take that to a higher level. Because the debts that cripple entire countries come mainly from war expenses, not pensions. And we don’t say it enough.


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